US consumer confidence slips in May for second month

29 May 2012 16:25[Source: ICIS news]

WASHINGTON (ICIS)--?xml:namespace>US consumer confidence fell in May for the second month in a row, a key survey said on Tuesday, driven by worries about business and labour conditions and low expectations for the nation’s economy over the next six months.

The Conference Board, a 95-year-old business analysis firm based in New York City, said its consumer confidence index (CCI) for May fell to 64.9 from the 68.7 measure recorded in April.

April had shown a decline in consumer confidence from March as well.

Lynn Franco, the board’s director of economic indicators, said the survey conducted in the first two weeks of May indicates that “consumers were less positive about current business and labour market conditions, and they were more pessimistic about the short-term outlook”.

In addition to the decline in the overall CCI, the board said its measure of consumers’ expectations fell to 77.6 in May from the April reading of 80.4.

Consumers’ sense about current economic conditions – known as the present situation index – also fell in May to 45.9 from the April measure of 51.2.

Although consumers were more upbeat in May about their near-term income prospects, Franco said "taken together, the retreat in the present situation index and softening in consumer expectations suggest that the pace of economic growth in months ahead may moderate”.

The number of consumers who feel that jobs are hard to get rose to 41% in May from 38.1% in April, the board said.Further, the board said consumers expecting more jobs in the months ahead fell to 15.8% in May from the 16.9% reading in April.

“Those claiming business conditions are ‘bad’ increased to 34.3% from 33.2%” in April, the survey added.

Finally, the Conference Board said consumers are losing confidence in US economic prospects for the short term.

“Those expecting business conditions to improve over the next six months decreased [in May] to 16.6% from 18.5% [in April],” the survey said.